Asia watch

By LACHLAN COLQUHOUN
Updated:

 

Spin-offs from operations controlled by tycoons Rupert Murdoch and Li Ka-shing made their debuts on Hong Kong's Growth Enterprise Market, with mixed results.

Mainland satellite broadcaster Phoenix Satellite, 38.25% controlled by News Corporation unit Star TV, hit an early high of HK$1.17, but later fell to trade only 1% above its HK$1.08 issue price. The float, of 15% of the company, raised HK$785m (£67m).

Li Ka-shing's offering fared better, with banking and financial information firm Excel Technology trading at HK$1.77 against the issue price of HK$1.38.

The float, a spin-off from Li's property flag-ship Cheung Kong, was 43 times oversubscribed. Cheung Kong will retain 11% of Excel.

The view among analysts is that the cachet of Li's name is enough to guarantee early success for Excel, while Phoenix is seen as overpriced, and with uncertain prospects in its main market in China.

The two debuts came amid a tough day for hi-tech stocks, with Far East markets also buffeted by the profit warnings which chilled America overnight. The Hang Seng was down 149.07 to 16,137.73.

Falls for the telecoms sector in Europe overnight put pressure on local telecoms players, particularly Hutchison Wham-poa, which aims to win third-generation mobile licences in Europe. Hutchison fell 1.26% to HK$98.25.

Cheung Kong dipped 0.5%, despite news that Li had lifted his personal stake by 0.5% to 36%, while market leader China Mobile, formerly China Telecom, suffered a 4.15% fall.

In Tokyo an expected bail-out for ailing department stores group Sogo was still the talk of the market.

While Sogo shares dipped slightly after adding almost 40% over the past two days, investors bought into other companies with substantial debts to Shinsei Bank, the former Long-Term Credit Bank of Japan. Shares in two of these companies, troubled property developers Kumagai Gumi and Hazama, spiked by more than 15%.

It looks as if Shinsei will succeed in offloading its 200b yen (£1.25bn) in Sogo loans to the government, which may then forgive a large part of the debt and restructure the rest. If that happens, investors believe the same will happen to other Shinsei debtors.

The Nikkei 225 Average closed down 64.85 at 17,411.05. Information and technology shares, and the broking sector, led the falls.

In Sydney Rio Tinto's takeover target North announced plans to spend C$361m (£161m) on upgrading its Canadian iron ore operations, part of what brokers say is a smokescreen for the company's defence against the hostile bid.

Despite hints from Japan's Nippon Steel that it may make a surprise entry as North's white knight, Rio shares continued to power higher, up 65 cents to A$27.15, while North was unchanged at A$3.96, still 16 cents above the Rio offer price.

The All Ordinaries was 11.1 up at 3216.6. Elsewhere, the biggest move came in Taiwan, the Weighted up 109.79 to 8230.68.

Malaysia's Composite continued its mid-year decline, off 6.26 to 823.99, Korea's Kospi fell 3.15 to 815.75, and Jakarta's Composite slipped 4.44 to 508.15. Singapore fell 7.30 to 2042.41.

Thailand's SET was in positive territory, up 1.39 to 324.74.

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